A third country

17 May 2017

Please lift your gaze from the UK’s tedious election, with its shop-worn manifestos and foregone conclusion. Just indulge me for a couple of blogs. I started paying attention to Brexit three years ago and rapidly came to doubt that Article 50 talks could reach a positive outcome. So, I reasoned, HMG should flush this out rather than fall prey to events. I now see the timetable coming to a early head. Here’s the argument.

-o-

On 29 April this year the European Commission published its guidelines for negotiating Brexit. Section II was entitled A phased approach to negotiation, within which paragraph 5 stated

“…an agreement on a future relationship between the Union and the United Kingdom as such can only be finalised and concluded once the United Kingdom has become  a third country…”(my emphasis)

This is what led Juncker to lose it after his famous dinner with May and Davis. He felt that the UK wasn’t taking this aspect of the matter seriously: according to the leaks, it was “living on a different planet”.

Let’s backtrack. The Commission’s guidelines are its way of meeting its obligations under the Treaty of Lisbon to

“submit recommendations to the Council…”
Article 218 on decision-making, as invoked by Article 50 on withdrawal

The European Parliament has also weighed in, though this is not required by the Treaty; indeed its role is unclear.

  • Article 50, 2 states that a withdrawal agreement “taking account of the framework for [a] future relationship with the Union” requires the “consent of the European Parliament”.
  • Parliamentary consent is also called for in Article 218, 6a, which applies inter alia to association agreements, co-operation procedures and important budgetary matters, any of which might apply to Brexit.
  • On the other hand, Article 218, 7 provides that “…the Council may, by way of derogation…authorise the negotiator to approve on the Union's behalf modifications to the agreement where it provides for them to be adopted by a simplified procedure…”

Let’s backtrack some more. Common sense varies from one EU body to another. The Council of Ministers, that is representatives of member-states, is seen as the most sensible, with the Commission in the middle and Parliament the most excitable. So in the normal course of things the UK would prefer to deal with the first. But the member-states are in little mood to look kindly upon the UK: for their own reasons, Germany and France remain utterly devoted to the Union.

There are other complications but to cut to the chase, the treaty, the negotiators and the internal dynamics of the EU combine to throw sand in the wheels of a timely settlement. In particular, the Commission’s insistence on treating the UK as a “third country” ensures that Parliament gets a say and multiplies the negotiation load. So the UK faces two alternatives:

  • It accepts the Commission’s guidelines and goes for an agreement as a “third country”. Yesterday, the ECJ ruled that if such agreements embrace investments (which is what the UK would want) they must also be ratified by every member state, including subsidiary assemblies where applicable. Never say never, but the timetable looks - shall we say? - challenging.
  • It persuades the Council of Ministers that impending Brexit does not yet make the UK a “third country”, so the Commission is told to undertake some sort of fast-track negotiations. For this to occur, the EU’s big countries have to be persuaded to see things our way, to go against public guidelines from Commission and Parliament and to see off any awkward-squad appeal to the ECJ. This is a big ask.

This takes us to the timetable, generally seen as working to the UK’s disadvantage. May called the election to give her headroom for a couple of years of adjustment after the Article 50 period expires. It makes sense, however, that should negotiations fail, both sides would need a similar period to adjust, working backwards from the end of the Article 50 period, that is from 29 March 2019. So May needs - everyone needs - to know one way or the other fairly soon.

-o-

It is not unknown for negotiations to admit of shadow-boxing. Maybe that’s what’s happening here: the UK and the EU have agreed at head of government level that a deal will be done but that we need to go through the motions. But it doesn’t feel that way. If not, May is on the horns of a dilemma: unless she flushes out the intentions of the EU, she risks compromising the stability on which she is campaigning, with negotiations escaping her control. We know she doesn’t like that. Instead she needs to engineer a situation in which the EU either acts constructively - that is her way, the UK’s way - or provides the raw-material to sell the talks’ failure to the country and the world. Tomorrow’s blog will present a rough and ready solution.